Senator Phil GrammÕs, chair of the Senate Banking Committee, announced last week that he will not seek re-election. Washington lobbyists and Congressional staffers believe that this move is likely to kill any major reform momentum for U.S. securities markets.

As chairman of the Senate Banking Committee, Gramm listed federal securities law review and modernization as one of his key objectives. He held hearings on market structure and championed the right of the markets to operate with minimal government interference. An economist, Gramm drove the adoption of 1999’s Gramm-Leach-Bliley Act that changed financial industry rules, allowing mergers of banks and brokerages within the financial services industry.

When the Democrats took control of the Senate in June, Gramm lost the committee’s chairmanship and the ability to dictate the agenda. “Without Gramm’s forceful presence and intelligence, and with no one else of like mind on the scene, any effort to revise the securities laws just won’t happen,” says one Washington lobbyist. “The effort it takes to push through significant legislation is a multi-year process that requires a sustained effort.”